Johnson & Johnson proposes $5.5 billion settlement to resolve remaining talc lawsuits

Johnson & Johnson said it will offer a $5.5 billion settlement to resolve the remaining lawsuits alleging its talc products caused ovarian cancer, provided at least 95% of claimants join the agreement. The proposal follows a U.S. bankruptcy judge’s rejection of a $9 billion settlement put forward by the company’s subsidiary, Red River Talc, last year.

A federal judge recently ordered plaintiffs to demonstrate why the pending talc claims should not be dismissed after their witnesses failed to establish a direct causal link between the product and cancer. > "The Court’s order placed plaintiffs in an untenable position of having to present specific causation evidence to maintain their claims that does not exist," Erik Haas, worldwide vice president of litigation at Johnson & Johnson, said in a prepared statement.

Under the new plan, Johnson & Johnson will make an initial payment of up to $3 billion next year, with no further payments required until 2028. > "While we are confident the company would have ultimately prevailed with further litigation, as it has in the vast majority of cases tried to date, this resolution allows the company to put this matter behind it and remain focused on its mission to develop medicines and devices that save lives," Haas added.

The company previously settled about 95% of lawsuits related to mesothelioma, state consumer-protection claims, and talc-supplier disputes. Shares of the New Brunswick, New Jersey-based firm rose more than 2% in pre-market trading on Tuesday.